UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2012
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 814-00733
Triangle Capital Corporation
(Exact name of registrant as specified in its charter)
Maryland | 06-1798488 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
3700 Glenwood Avenue, Suite 530 Raleigh, North Carolina |
27612 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (919) 719-4770
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares outstanding of the registrants Common Stock on May 2, 2012 was 27,263,151.
TRIANGLE CAPITAL CORPORATION
QUARTERLY REPORT ON FORM 10-Q
Page | ||||||
PART I FINANCIAL INFORMATION | ||||||
Item 1. | ||||||
3 | ||||||
Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2011 |
4 | |||||
5 | ||||||
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011 |
6 | |||||
Unaudited Consolidated Schedule of Investments as of March 31, 2012 |
7 | |||||
Consolidated Schedule of Investments as of December 31, 2011 |
12 | |||||
17 | ||||||
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
28 | ||||
Item 3. | 38 | |||||
Item 4. | 39 | |||||
PART II OTHER INFORMATION | ||||||
Item 1. | 39 | |||||
Item 1A. | 39 | |||||
Item 2. | 39 | |||||
Item 3. | 40 | |||||
Item 4. | 40 | |||||
Item 5. | 40 | |||||
Item 6. | 40 | |||||
Signatures | 42 | |||||
Exhibits |
2
PART I FINANCIAL INFORMATION
Consolidated Balance Sheets
March 31, | December 31, | |||||||
2012 | 2011 | |||||||
(Unaudited) | ||||||||
Assets |
||||||||
Investments at fair value: |
||||||||
NonControl / NonAffiliate investments (cost of $424,962,392 and $389,312,451 at March 31, 2012 and December 31, 2011, respectively) |
$ | 436,419,052 | $ | 396,502,490 | ||||
Affiliate investments (cost of $98,502,634 and $97,751,264 at March 31, 2012 and December 31, 2011, respectively) |
101,197,149 | 103,266,298 | ||||||
Control investments (cost of $11,464,968 and $11,278,339 at March 31, 2012 and December 31, 2011, respectively) |
6,818,996 | 7,309,787 | ||||||
|
|
|
|
|||||
Total investments at fair value |
544,435,197 | 507,078,575 | ||||||
Cash and cash equivalents |
142,514,158 | 66,868,340 | ||||||
Interest and fees receivable |
2,745,074 | 1,883,395 | ||||||
Prepaid expenses and other current assets |
470,126 | 623,318 | ||||||
Deferred financing fees |
8,485,166 | 6,682,889 | ||||||
Property and equipment, net |
60,611 | 58,304 | ||||||
|
|
|
|
|||||
Total assets |
$ | 698,710,332 | $ | 583,194,821 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Accounts payable and accrued liabilities |
$ | 1,510,224 | $ | 4,116,822 | ||||
Interest payable |
1,205,864 | 3,521,932 | ||||||
Taxes payable |
203,893 | 1,402,866 | ||||||
Deferred income taxes |
775,953 | 628,742 | ||||||
Borrowings under credit facility |
| 15,000,000 | ||||||
Senior notes |
69,000,000 | | ||||||
SBA-guaranteed debentures payable |
213,871,133 | 224,237,504 | ||||||
|
|
|
|
|||||
Total liabilities |
286,567,067 | 248,907,866 | ||||||
Net Assets |
||||||||
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,263,151 and 22,774,726 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively) |
27,263 | 22,775 | ||||||
Additional paid-in-capital |
396,320,487 | 318,297,269 | ||||||
Investment income in excess of distributions |
6,054,619 | 6,847,486 | ||||||
Accumulated realized gains on investments |
1,011,649 | 1,011,649 | ||||||
Net unrealized appreciation of investments |
8,729,247 | 8,107,776 | ||||||
|
|
|
|
|||||
Total net assets |
412,143,265 | 334,286,955 | ||||||
|
|
|
|
|||||
Total liabilities and net assets |
$ | 698,710,332 | $ | 583,194,821 | ||||
|
|
|
|
|||||
Net asset value per share |
$ | 15.12 | $ | 14.68 | ||||
|
|
|
|
See accompanying notes.
3
Unaudited Consolidated Statements of Operations
Three Months Ended |
Three Months Ended |
|||||||
March 31, 2012 |
March 31, 2011 |
|||||||
Investment income: |
||||||||
Loan interest, fee and dividend income: |
||||||||
NonControl / NonAffiliate investments |
$ | 12,963,602 | $ | 8,749,449 | ||||
Affiliate investments |
2,717,149 | 1,374,243 | ||||||
Control investments |
59,773 | 258,268 | ||||||
|
|
|
|
|||||
Total loan interest, fee and dividend income |
15,740,524 | 10,381,960 | ||||||
Paidinkind interest income: |
||||||||
NonControl / NonAffiliate investments |
2,587,267 | 1,481,820 | ||||||
Affiliate investments |
654,233 | 395,171 | ||||||
Control investments |
19,971 | 65,297 | ||||||
|
|
|
|
|||||
Total paidinkind interest income |
3,261,471 | 1,942,288 | ||||||
Interest income from cash and cash equivalent investments |
109,858 | 101,149 | ||||||
|
|
|
|
|||||
Total investment income |
19,111,853 | 12,425,397 | ||||||
|
|
|
|
|||||
Expenses: |
||||||||
Interest and credit facility fees |
3,087,820 | 1,989,984 | ||||||
Amortization of deferred financing fees |
222,917 | 152,173 | ||||||
General and administrative expenses |
3,607,267 | 2,397,523 | ||||||
|
|
|
|
|||||
Total expenses |
6,918,004 | 4,539,680 | ||||||
|
|
|
|
|||||
Net investment income |
12,193,849 | 7,885,717 | ||||||
Net unrealized appreciation of investments |
621,471 | 4,595,755 | ||||||
|
|
|
|
|||||
Total net gain on investments before income taxes |
621,471 | 4,595,755 | ||||||
Loss on extinguishment of debt |
(205,043 | ) | (157,590 | ) | ||||
Income tax benefit |
7,231 | 27,359 | ||||||
|
|
|
|
|||||
Net increase in net assets resulting from operations |
$ | 12,617,508 | $ | 12,351,241 | ||||
|
|
|
|
|||||
Net investment income per sharebasic and diluted |
$ | 0.49 | $ | 0.47 | ||||
|
|
|
|
|||||
Net increase in net assets resulting from operations per sharebasic and diluted |
$ | 0.50 | $ | 0.73 | ||||
|
|
|
|
|||||
Dividends declared per common share |
$ | 0.47 | $ | 0.42 | ||||
|
|
|
|
|||||
Weighted average number of shares outstandingbasic and diluted |
25,075,300 | 16,848,570 | ||||||
|
|
|
|
See accompanying notes.
4
Unaudited Consolidated Statements of Changes in Net Assets
Investment | Accumulated | Net | ||||||||||||||||||||||||||
Income | Realized | Unrealized | ||||||||||||||||||||||||||
Common Stock | Additional | in Excess of | Gains | Appreciation | Total | |||||||||||||||||||||||
Number | Par | Paid In | (Less Than) | (Losses) on | (Depreciation) | Net | ||||||||||||||||||||||
of Shares | Value | Capital | Distributions | Investments | of Investments | Assets | ||||||||||||||||||||||
Balance, January 1, 2011 |
14,928,987 | $ | 14,929 | $ | 183,602,755 | $ | 3,365,548 | $ | (8,244,376 | ) | $ | 1,740,303 | $ | 180,479,159 | ||||||||||||||
Net investment income |
| | | 7,885,717 | | | 7,885,717 | |||||||||||||||||||||
Stock-based compensation |
| | 414,329 | | | | 414,329 | |||||||||||||||||||||
Net unrealized gains on investments |
| | | | | 4,595,755 | 4,595,755 | |||||||||||||||||||||
Loss on extinguishment of debt |
| | | (157,590 | ) | | | (157,590 | ) | |||||||||||||||||||
Income tax benefit |
| | | 27,359 | | | 27,359 | |||||||||||||||||||||
Dividends/distributions declared |
61,766 | 62 | 1,094,444 | (7,773,397 | ) | | | (6,678,891 | ) | |||||||||||||||||||
Public offering of common stock |
3,450,000 | 3,450 | 63,134,805 | | | | 63,138,255 | |||||||||||||||||||||
Issuance of restricted stock |
152,779 | 153 | (153 | ) | | | | | ||||||||||||||||||||
Common stock withheld for payroll taxes upon vesting of restricted stock |
(23,676 | ) | (24 | ) | (485,571 | ) | | | | (485,595 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, March 31, 2011 |
18,569,856 | $ | 18,570 | $ | 247,760,609 | $ | 3,347,637 | $ | (8,244,376 | ) | $ | 6,336,058 | $ | 249,218,498 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment | Accumulated | Net | ||||||||||||||||||||||||||
Income | Realized | Unrealized | ||||||||||||||||||||||||||
Common Stock | Additional | in Excess of | Gains | Appreciation | Total | |||||||||||||||||||||||
Number | Par | Paid In | (Less Than) | (Losses) on | (Depreciation) | Net | ||||||||||||||||||||||
of Shares | Value | Capital | Distributions | Investments | of Investments | Assets | ||||||||||||||||||||||
Balance, January 1, 2012 |
22,774,726 | $ | 22,775 | $ | 318,297,269 | $ | 6,847,486 | $ | 1,011,649 | $ | 8,107,776 | $ | 334,286,955 | |||||||||||||||
Net investment income |
| | | 12,193,849 | | | 12,193,849 | |||||||||||||||||||||
Stock-based compensation |
| | 648,750 | | | | 648,750 | |||||||||||||||||||||
Net unrealized gains on investments |
| | | | | 621,471 | 621,471 | |||||||||||||||||||||
Loss on extinguishment of debt |
| | | (205,043 | ) | | | (205,043 | ) | |||||||||||||||||||
Income tax benefit |
| | | 7,231 | | | 7,231 | |||||||||||||||||||||
Dividends/distributions declared |
52,717 | 52 | 1,028,467 | (12,788,904 | ) | | | (11,760,385 | ) | |||||||||||||||||||
Public offering of common stock |
4,255,000 | 4,255 | 77,243,819 | | | | 77,248,074 | |||||||||||||||||||||
Issuance of restricted stock |
227,631 | 228 | (228 | ) | | | | | ||||||||||||||||||||
Common stock withheld for payroll taxes upon vesting of restricted stock |
(46,923 | ) | (47 | ) | (897,590 | ) | | | | (897,637 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, March 31, 2012 |
27,263,151 | $ | 27,263 | $ | 396,320,487 | $ | 6,054,619 | $ | 1,011,649 | $ | 8,729,247 | $ | 412,143,265 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
5
Unaudited Consolidated Statements of Cash Flows
Three
Months Ended March 31, 2012 |
Three
Months Ended March 31, 2011 |
|||||||
Cash flows from operating activities: |
||||||||
Net increase in net assets resulting from operations |
$ | 12,617,508 | $ | 12,351,241 | ||||
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities: |
||||||||
Purchases of portfolio investments |
(41,952,989 | ) | (68,275,512 | ) | ||||
Repayments received/sales of portfolio investments |
8,253,844 | 14,936,864 | ||||||
Loan origination and other fees received |
666,420 | 1,466,292 | ||||||
Net unrealized appreciation of investments |
(768,682 | ) | (4,789,955 | ) | ||||
Deferred income taxes |
147,211 | 194,200 | ||||||
Paymentinkind interest accrued, net of payments received |
(2,704,362 | ) | (857,493 | ) | ||||
Amortization of deferred financing fees |
222,917 | 152,173 | ||||||
Loss on extinguishment of debt |
205,043 | 157,590 | ||||||
Accretion of loan origination and other fees |
(476,512 | ) | (415,247 | ) | ||||
Accretion of loan discounts |
(374,341 | ) | (260,986 | ) | ||||
Accretion of discount on SBA-guaranteed debentures payable |
43,629 | 42,378 | ||||||
Depreciation expense |
7,349 | 7,064 | ||||||
Stock-based compensation |
648,750 | 414,329 | ||||||
Changes in operating assets and liabilities: |
||||||||
Interest and fees receivable |
(861,679 | ) | (532,986 | ) | ||||
Prepaid expenses |
153,192 | (218,943 | ) | |||||
Accounts payable and accrued liabilities |
(2,606,598 | ) | (1,341,160 | ) | ||||
Interest payable |
(2,316,068 | ) | (1,774,828 | ) | ||||
Deferred revenue |
| 5,287 | ||||||
Taxes payable |
(1,198,973 | ) | (191,672 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
(30,294,341 | ) | (48,931,364 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(9,656 | ) | (18,115 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(9,656 | ) | (18,115 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Borrowings under SBA-guaranteed debentures payable |
| 21,600,000 | ||||||
Repayments of SBA-guaranteed debentures payable |
(10,410,000 | ) | (9,500,000 | ) | ||||
Repayments of credit facility |
(15,000,000 | ) | | |||||
Proceeds from senior notes |
69,000,000 | | ||||||
Financing fees paid |
(2,230,237 | ) | (523,801 | ) | ||||
Proceeds from public stock offerings, net of expenses |
77,248,074 | 63,138,255 | ||||||
Common stock withheld for payroll taxes upon vesting of restricted stock |
(897,637 | ) | (485,595 | ) | ||||
Cash dividends paid |
(11,760,385 | ) | (6,678,891 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
105,949,815 | 67,549,968 | ||||||
|
|
|
|
|||||
Net increase in cash and cash equivalents |
75,645,818 | 18,600,489 | ||||||
Cash and cash equivalents, beginning of period |
66,868,340 | 54,820,222 | ||||||
|
|
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|
|||||
Cash and cash equivalents, end of period |
$ | 142,514,158 | $ | 73,420,711 | ||||
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|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest |
$ | 5,289,789 | $ | 3,722,434 | ||||
|
|
|
|
See accompanying notes.
6
Unaudited Consolidated Schedule of Investments
March 31, 2012
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
NonControl / NonAffiliate Investments: |
| |||||||||||||||
Ambient Air Corporation (AA) and Peaden-Hobbs Mechanical, LLC (PHM) (1%)* |
Specialty Trade Contractors | Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13) | $ | 4,159,154 | $ | 4,138,386 | $ | 4,138,386 | ||||||||
Subordinated Note-PHM (12% Cash, Due 09/12) | 12,857 | 12,857 | 12,857 | |||||||||||||
Common Stock-PHM (128,571 shares) | 128,571 | 128,571 | ||||||||||||||
Common Stock Warrants-AA (455 shares) | 142,361 | 841,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,172,011 | 4,422,175 | 5,120,814 | ||||||||||||||
Anns House of Nuts, Inc. (3%)* |
Trail Mixes and Nut Producers | Subordinated Note (12% Cash, 1% PIK, Due 11/17) | 7,098,742 | 6,745,782 | 6,745,782 | |||||||||||
Preferred A Units (22,368 units) | 2,124,957 | 2,400,000 | ||||||||||||||
Preferred B Units (10,380 units) | 986,059 | 1,244,000 | ||||||||||||||
Common Units (190,935 units) | 150,000 | | ||||||||||||||
Common Stock Warrants (14,558 shares) | 14,558 | | ||||||||||||||
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|
|
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|
|||||||||||
7,098,842 | 10,021,356 | 10,389,782 | ||||||||||||||
Aramsco, Inc. (0%) |
Environmental Emergency Preparedness Products Distributor | Subordinated Note (12% Cash, 2% PIK, Due 03/14) | |
1,747,290 |
|
|
1,632,143 |
|
|
1,632,143 |
| |||||
|
|
|
|
|
|
|||||||||||
1,747,290 | 1,632,143 | 1,632,143 | ||||||||||||||
Assurance Operations Corporation (0%)* |
Metal Fabrication | Common Stock (517 Shares) | 516,867 | 798,000 | ||||||||||||
|
|
|
|
|||||||||||||
516,867 | 798,000 | |||||||||||||||
BioSan Laboratories, Inc. (1%)* |
Nutritional Supplement Manufacturing and Distribution | Subordinated Note (12% Cash, 3.8% PIK, Due 10/16) | |
5,326,311 |
|
|
5,233,287 |
|
|
5,233,287 |
| |||||
|
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|
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|
|
|||||||||||
5,326,311 | 5,233,287 | 5,233,287 | ||||||||||||||
Botanical Laboratories, Inc. (2%)* |
Nutritional Supplement Manufacturing and Distribution | Senior Notes (14% Cash, 1% PIK, Due 02/15) | 9,887,499 | 9,386,329 | 9,386,329 | |||||||||||
Common Unit Warrants (998,680 Units) | 474,600 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
9,887,499 | 9,860,929 | 9,386,329 | ||||||||||||||
Capital Contractors, Inc. (2%)* |
Janitorial and Facilities Maintenance Services | Subordinated Notes (12% Cash, 2% PIK, Due 12/15) | |
9,231,740 |
|
|
8,692,515 |
|
|
8,692,515 |
| |||||
Common Stock Warrants (20 shares) | 492,000 | 406,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
9,231,740 | 9,184,515 | 9,098,515 | ||||||||||||||
Carolina Beverage Group, LLC (3%)* |
Beverage | Subordinated Note (12% Cash, 4% PIK, Due | ||||||||||||||
Manufacturing and Packaging | 02/16) | 13,394,977 | 13,200,222 | 13,200,222 | ||||||||||||
Class A Units (11,974 Units) | 1,077,615 | 1,193,000 | ||||||||||||||
Class B Units (11,974 Units) | 119,735 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,394,977 | 14,397,572 | 14,393,222 | ||||||||||||||
Continental Anesthesia Management, LLC (2%)* |
Physicians | Senior Note (13.5% Cash, Due 11/14) | 10,200,000 | 9,917,463 | 9,917,463 | |||||||||||
Management | ||||||||||||||||
Services | Warrant (263 shares) | 276,100 | 115,000 | |||||||||||||
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|
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|
|
|||||||||||
10,200,000 | 10,193,563 | 10,032,463 | ||||||||||||||
CRS Reprocessing, LLC (6%)* |
Fluid Reprocessing Services | Subordinated Note (12% Cash, 2% PIK, Due 11/15) | |
11,414,774 |
|
|
11,103,141 |
|
|
11,103,141 |
| |||||
Subordinated Note (12% Cash, 2% PIK, Due 11/15) | |
11,072,372 |
|
|
10,126,929 |
|
|
10,126,929 |
| |||||||
Series C Preferred Units (26 Units) | 288,342 | 463,000 | ||||||||||||||
Common Unit Warrant (550 Units) | 1,253,556 | 4,065,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
22,487,146 | 22,771,968 | 25,758,070 | ||||||||||||||
CV Holdings, LLC (4%)* |
Specialty | Subordinated Note (12% Cash, 4% PIK, Due | ||||||||||||||
Healthcare | 09/13) | 9,373,192 | 8,996,545 | 8,996,545 | ||||||||||||
Products | Subordinated Note (12% Cash, Due 09/13) | 6,000,000 | 5,923,793 | 5,923,793 | ||||||||||||
Manufacturer | Royalty rights | 874,400 | 832,000 | |||||||||||||
|
|
|
|
|
|
|||||||||||
15,373,192 | 15,794,738 | 15,752,338 | ||||||||||||||
DLR Restaurants, LLC (3%)* |
Restaurant | Subordinated Note (12% Cash, 3% PIK, Due 03/16) | |
10,741,488 |
|
|
10,538,856 |
|
|
10,538,856 |
| |||||
Subordinated Note (12% Cash, 4% PIK, Due 03/16) | |
759,713 |
|
|
759,713 |
|
|
759,713 |
| |||||||
Royalty rights | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
11,501,201 | 11,298,569 | 11,298,569 | ||||||||||||||
Electronic Systems Protection, Inc. (1%)* |
Power Protection Systems Manufacturing | Subordinated Note (12% Cash, 2% PIK, Due 12/15) | |
4,183,612 |
|
|
4,150,879 |
|
|
4,150,879 |
| |||||
Common Stock (570 shares) | 285,000 | 369,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,183,612 | 4,435,879 | 4,519,879 | ||||||||||||||
Frozen Specialties, Inc. (2%)* |
Frozen Foods Manufacturer | Subordinated Note (13% Cash, 5% PIK, Due 07/14) | 8,586,345 | 8,506,946 | 8,506,946 | |||||||||||
|
|
|
|
|
|
|||||||||||
8,586,345 | 8,506,946 | 8,506,946 |
7
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2012
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Garden Fresh Restaurant Corp. (0%)* |
Restaurant | Membership Units (5,000 units) |
$ | 500,000 | $ | 740,000 | ||||||||||
|
|
|
|
|||||||||||||
500,000 | 740,000 | |||||||||||||||
Grindmaster-Cecilware Corp. (1%)* |
Food Services Equipment Manufacturer | Subordinated Note (12% Cash, 6% PIK, Due 04/16) | 6,369,993 | 6,298,897 | 5,529,000 | |||||||||||
|
|
|
|
|
|
|||||||||||
6,369,993 | 6,298,897 | 5,529,000 | ||||||||||||||
Hatch Chile Co., LLC (1%)* |
Food Products Distributor | Senior Note (19% Cash, Due 07/15) | 4,500,000 | 4,415,726 | 4,415,726 | |||||||||||
Subordinated Note (14% Cash, Due 07/15) | 1,000,000 | 873,286 | 873,286 | |||||||||||||
Unit Purchase Warrant (5,265 Units) | 149,800 | 267,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,500,000 | 5,438,812 | 5,556,012 | ||||||||||||||
Home Physicians, LLC (HP) and Home Physicians Holdings, LP (HPH) (2%)* |
In-home primary care physician services | Subordinated NoteHP (12% Cash, 5% PIK, Due 03/16) | 10,789,319 | 10,599,352 | 9,300,000 | |||||||||||
Subordinated NoteHPH (4% Cash, 6% PIK, Due 03/16) | 1,303,361 | 1,303,361 | | |||||||||||||
Subordinated NoteHP (14% Cash, 2% PIK, Due 3/16) | 602,970 | 591,498 | 591,498 | |||||||||||||
Royalty rights | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
12,695,650 | 12,494,211 | 9,891,498 | ||||||||||||||
Infrastructure Corporation of America, Inc. (3%)* |
Roadway Maintenance, Repair and Engineering Services | Subordinated Note (12% Cash, 1% PIK, Due 10/15) | 10,906,338 | 9,958,194 | 9,958,194 | |||||||||||
Common Stock Purchase Warrant (199,526 shares) | 980,000 | 1,255,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,906,338 | 10,938,194 | 11,213,194 | ||||||||||||||
Inland Pipe Rehabilitation Holding Company LLC |
Cleaning and Repair Services | Subordinated Note (13% Cash, 2.5% PIK, Due 12/16) | 20,405,615 | 20,135,203 | 20,135,203 | |||||||||||
Membership Interest Purchase Warrant (3.0%) | 853,500 | 2,198,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
20,405,615 | 20,988,703 | 22,333,203 | ||||||||||||||
Library Systems & Services, LLC (1%)* |
Municipal Business Services | Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15) | 5,309,720 | 5,196,733 | 5,196,733 | |||||||||||
Common Stock Warrants (112 shares) | 58,995 | 771,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,309,720 | 5,255,728 | 5,967,733 | ||||||||||||||
Magpul Industries Corp. (4%) |
Firearm Accessories Manufacturer and Distributor | Subordinated Note (12% Cash, 3% PIK, Due 03/17) | 13,300,000 | 13,051,683 | 13,051,683 | |||||||||||
Preferred Units (1,470 Units) | 1,470,000 | 1,583,000 | ||||||||||||||
Common Units (30,000 Units) | 30,000 | 1,050,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,300,000 | 14,551,683 | 15,684,683 | ||||||||||||||
Media Storm, LLC (2%)* |
Marketing Services | Subordinated Note (12% Cash, 2% PIK, Due 10/17) | 8,574,772 | 8,494,784 | 8,494,784 | |||||||||||
Membership Units (1,216,204 Units) | 1,216,204 | 1,216,204 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,574,772 | 9,710,988 | 9,710,988 | ||||||||||||||
Media Temple, Inc. (4%)* |
Web Hosting Services | Subordinated Note (12% Cash, 5.5% PIK, Due 04/15) | 8,800,000 | 8,667,526 | 8,667,526 | |||||||||||
Convertible Note (8% Cash, 6% PIK, Due 04/15) | 3,200,000 | 2,806,774 | 5,099,000 | |||||||||||||
Common Stock Purchase Warrant (28,000 Shares) | 536,000 | 2,231,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
12,000,000 | 12,010,300 | 15,997,526 | ||||||||||||||
Minco Technology Labs, LLC (1%)* |
Semiconductor Distribution | Subordinated Note (13% Cash, 3.25% PIK, Due 05/16) | 5,315,744 | 5,217,911 | 5,217,911 | |||||||||||
Class A Units (5,000 Units) | 500,000 | 83,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,315,744 | 5,717,911 | 5,300,911 | ||||||||||||||
National Investment Managers Inc. (3%)* |
Retirement Plan Administrator | Subordinated Note (11% Cash, 5% PIK, Due 09/16) | 11,850,947 | 11,609,186 | 11,609,186 | |||||||||||
Preferred A Units (90,000 Units) | 900,000 | 479,000 | ||||||||||||||
Common Units (10,000 Units) | 100,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
11,850,947 | 12,609,186 | 12,088,186 | ||||||||||||||
Novolyte Technologies, Inc. (3%)* |
Specialty Manufacturing | Subordinated Note (12% Cash, 4% PIK, Due 07/16) | 7,337,631 | 7,221,971 | 7,221,971 | |||||||||||
Subordinated Note (12% Cash, 4% PIK, Due 07/16) | 2,358,525 | 2,321,349 | 2,321,349 | |||||||||||||
Preferred Units (641 units) | 661,227 | 874,000 | ||||||||||||||
Common Units (24,522 units) | 165,306 | 2,198,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
9,696,156 | 10,369,853 | 12,615,320 | ||||||||||||||
Pomeroy IT Solutions (2%)* |
Information Technology Outsourcing Services | Subordinated Notes (13% Cash, 2% PIK, Due 02/16) | |
10,232,670 |
|
|
10,017,621 |
|
|
10,017,621 |
| |||||
|
|
|
|
|
|
|||||||||||
10,232,670 | 10,017,621 | 10,017,621 | ||||||||||||||
PowerDirect Marketing, LLC (2%)* |
Marketing Services | Subordinated Note (12% Cash, 2% PIK, Due 05/16) | 8,142,017 | 7,643,193 | 7,643,193 | |||||||||||
Common Unit Purchase Warrants | 402,000 | 736,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,142,017 | 8,045,193 | 8,379,193 |
8
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2012
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Renew Life Formulas, Inc. (3%)* |
Nutritional Supplement Manufacturing and Distribution | Subordinated Notes (12% Cash, 2% PIK, Due 03/15) | $ |
13,283,019 |
|
$ |
13,052,984 |
|
$ |
13,052,984 |
| |||||
|
|
|
|
|
|
|||||||||||
13,283,019 | 13,052,984 | 13,052,984 | ||||||||||||||
ROM Acquisition Corporation (2%)* |
Military and Industrial Vehicles Equipment Manufacturing | Subordinated Note (12% Cash, 3% PIK, Due 3/17) | |
8,500,000 |
|
|
8,415,000 |
|
|
8,415,000 |
| |||||
|
|
|
|
|
|
|||||||||||
8,500,000 | 8,415,000 | 8,415,000 | ||||||||||||||
Sheplers, Inc. (3%)* |
Western Apparel Retailer | Subordinated Note (13.15% Cash, Due 12/16) | 8,750,000 | 8,539,166 | 8,539,166 | |||||||||||
Subordinated Note (10% Cash, 7% PIK, Due 12/17) | 3,823,585 | 3,751,521 | 3,751,521 | |||||||||||||
|
|
|
|
|
|
|||||||||||
12,573,585 | 12,290,687 | 12,290,687 | ||||||||||||||
SRC, Inc. (2%)* |
Specialty Chemical Manufacturer | Subordinated Notes (12% Cash, 2% PIK, Due 09/14) | 8,924,137 | 8,701,808 | 8,701,808 | |||||||||||
Common Stock Purchase Warrants | 123,800 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,924,137 | 8,825,608 | 8,701,808 | ||||||||||||||
Stella Environmental Services, LLC (1%)* |
Waste Transfer Stations | Subordinated Notes (12% Cash, 3.5% PIK, Due 2/17) | 6,277,344 | 6,132,344 | 6,132,344 | |||||||||||
Common Stock Purchase Warrants | 20,000 | 20,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
6,277,344 | 6,152,344 | 6,152,344 | ||||||||||||||
Syrgis Holdings, Inc. (1%)* |
Specialty Chemical Manufacturer | Senior Notes (7.75%-10.75% Cash, Due 08/12-02/14) | 2,063,764 | 2,059,161 | 2,059,161 | |||||||||||
Class C Units (2,114 units) | 1,000,000 | 1,625,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
2,063,764 | 3,059,161 | 3,684,161 | ||||||||||||||
The Krystal Company (3%)* |
Quick Serve Restaurants | Subordinated Note (12% Cash, 3% PIK, Due 6/17) | 12,232,203 | 11,987,783 | 11,987,783 | |||||||||||
Class A Units of Limited Partnership | 2,000,000 | 2,000,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
12,232,203 | 13,987,783 | 13,987,783 | ||||||||||||||
TMR Automotive Service Supply, LLC (1%) |
Automotive Supplies | Subordinated Note (12% Cash, 1% PIK, Due 03/16) | 4,750,000 | 4,500,930 | 4,500,930 | |||||||||||
Unit Purchase Warrant (329,518 units) | 195,000 | 322,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,750,000 | 4,695,930 | 4,822,930 | ||||||||||||||
Top Knobs USA, Inc. (3%) |
Hardware Designer and Distributor | Subordinated Note (12% Cash, 4.5% PIK, Due 05/17) | 10,486,949 | 10,338,011 | 10,338,011 | |||||||||||
Common Stock (26,593 shares) | 750,000 | 763,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,486,949 | 11,088,011 | 11,101,011 | ||||||||||||||
Trinity Consultants Holdings, Inc. (2%)* |
Air Quality Consulting Services | Subordinated Note (12% Cash, 2.5% PIK, Due 11/17) | 7,262,200 | 7,122,383 | 7,122,383 | |||||||||||
Series A Preferred Stock (10,000 units) | 950,000 | 950,000 | ||||||||||||||
Common Stock (55,556 units) | 50,000 | 50,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,262,200 | 8,122,383 | 8,122,383 | ||||||||||||||
TrustHouse Services Group, Inc. (3%)* |
Food Management Services | Subordinated Note (12% Cash, 2% PIK, Due 07/18) | 13,429,668 | 13,208,258 | 13,208,258 | |||||||||||
Class A Units (1,557 units) | 512,124 | 872,000 | ||||||||||||||
Class B Units (82 units) | 26,954 | 31,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,429,668 | 13,747,336 | 14,111,258 | ||||||||||||||
Tulsa Inspection Resources, Inc. (2%)* |
Pipeline Inspection Services | Subordinated Note (14%-17.5% Cash, Due 03/14) | 5,810,588 | 5,597,045 | 5,597,045 | |||||||||||
Common Unit (1 unit) | 407,000 | 169,000 | ||||||||||||||
Common Stock Warrants (8 shares) | 321,000 | 904,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,810,588 | 6,325,045 | 6,670,045 | ||||||||||||||
Twin-Star International, Inc. (1%)* |
Consumer Home Furnishings Manufacturer | Subordinated Note (12% Cash, 1% PIK, Due 04/14) | 4,500,000 | 4,479,768 | 4,479,768 | |||||||||||
Senior Note (4.4%, Due 04/13) | 1,049,490 | 1,049,490 | 1,049,490 | |||||||||||||
|
|
|
|
|
|
|||||||||||
5,549,490 | 5,529,258 | 5,529,258 | ||||||||||||||
United Biologics, LLC (3%)* |
Allergy Immunotherapy Services | Subordinated Note (12% Cash, 2% PIK, Due 03/17) | 10,015,000 | 8,976,883 | 8,976,883 | |||||||||||
Class A Common Stock (177,935 shares) | 1,999,989 | 1,999,989 | ||||||||||||||
Class A & Class B Unit Purchase Warrants | 838,117 | 838,117 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,015,000 | 11,814,989 | 11,814,989 | ||||||||||||||
Wholesale Floors, Inc. (1%)* |
Commercial Services | Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14) | 3,892,041 | 3,814,306 | 3,814,306 | |||||||||||
Membership Interest Purchase Warrant (4.0%) | 132,800 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,892,041 | 3,947,106 | 3,814,306 |
9
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2012
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Workforce Software, LLC (2%)* |
Software Provider | Subordinated Note (11% Cash, 3% PIK, Due 11/16) | $ | 7,000,000 | $ | 6,100,883 | $ | 6,100,883 | ||||||||
Class B Preferred Units (1,020,000 units) | 1,020,000 | 1,055,000 | ||||||||||||||
Common Unit Purchase Warrants (2,224,561 units) | 782,300 | 1,259,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,000,000 | 7,903,183 | 8,414,883 | ||||||||||||||
Yellowstone Landscape Group, Inc. (3%)* |
Landscaping Services | Subordinated Note (12% Cash, 3% PIK, Due 04/14) | 12,912,344 | 12,787,797 | 12,787,797 | |||||||||||
|
|
|
|
|
|
|||||||||||
12,912,344 | 12,787,797 | 12,787,797 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal NonControl / NonAffiliate Investments |
408,452,020 | 424,962,392 | 436,419,052 | |||||||||||||
Affiliate Investments: |
| |||||||||||||||
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)* |
Wholesale and Distribution | Subordinated Note (12% Cash, 6% PIK, Due 10/13) | 6,149,120 | 5,229,264 | 5,229,264 | |||||||||||
Membership Units (6,516 Units) | 350,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
6,149,120 | 5,579,264 | 5,229,264 | ||||||||||||||
AP Services, Inc. (1%)* |
Fluid Sealing Supplies and Services | Subordinated Note (12% Cash, 2% PIK, Due 09/15) | 4,373,582 | 4,285,506 | 4,285,506 | |||||||||||
Class A Units (933 units) | 933,333 | 1,177,000 | ||||||||||||||
Class B Units (496 units) | | 67,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,373,582 | 5,218,839 | 5,529,506 | ||||||||||||||
Asset Point, LLC (1%)* |
Asset Management Software Provider | Senior Note (12% Cash, 5% PIK, Due 03/13) | 6,131,799 | 6,106,812 | 6,106,812 | |||||||||||
Senior Note (12% Cash, 2% PIK, Due 07/15) | 620,700 | 620,700 | 555,000 | |||||||||||||
Subordinated Note (7% Cash, Due 03/13) | 941,798 | 941,798 | 831,000 | |||||||||||||
Membership Units (1,000,000 units) | 8,203 | 373,000 | ||||||||||||||
Options to Purchase Membership Units (342,407 units) | 500,000 | 167,000 | ||||||||||||||
Membership Unit Warrants (356,506 units) | | 2,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,694,297 | 8,177,513 | 8,034,812 | ||||||||||||||
Axxiom Manufacturing, Inc. (0%)* |
Industrial Equipment Manufacturer | Common Stock (136,400 shares) | 200,000 | 1,232,000 | ||||||||||||
Common Stock Warrant (4,000 shares) | | 36,000 | ||||||||||||||
|
|
|
|
|||||||||||||
200,000 | 1,268,000 | |||||||||||||||
Brantley Transportation, LLC (Brantley Transportation) and Pine Street Holdings, LLC (Pine Street) (4) (1%)* |
Oil and Gas Services | Subordinated NoteBrantley Transportation (14% Cash, 5% PIK, Due 12/12) | 3,997,731 | 3,973,079 | 3,973,079 | |||||||||||
Common Unit WarrantsBrantley Transportation (4,560 common units) | 33,600 | 381,000 | ||||||||||||||
Preferred UnitsPine Street (200 units) | 200,000 | 719,000 | ||||||||||||||
Common Unit WarrantsPine Street (2,220 units) | | 88,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,997,731 | 4,206,679 | 5,161,079 | ||||||||||||||
Captek Softgel International, Inc. (2%)* |
Nutraceutical Manufacturer | Subordinated Note (12% Cash, 4% PIK, Due 08/16) | 8,361,089 | 8,223,010 | 8,223,010 | |||||||||||
Class A Units (80,000 units) | 800,000 | 1,298,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,361,089 | 9,023,010 | 9,521,010 | ||||||||||||||
Dyson Corporation (1%)* |
Custom | Class A Units (1,000,000 units) | 1,000,000 | 3,741,000 | ||||||||||||
Forging and | ||||||||||||||||
Fastener | ||||||||||||||||
Supplies | ||||||||||||||||
|
|
|
|
|||||||||||||
1,000,000 | 3,741,000 | |||||||||||||||
Equisales, LLC (0%)* |
Energy Products and Services | Subordinated Note (13% Cash, 4% PIK, Due 04/12) | 3,157,043 | 3,157,043 | 2,659,000 | |||||||||||
Class A Units (500,000 units) | 480,900 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,157,043 | 3,637,943 | 2,659,000 | ||||||||||||||
Fischbein Partners, LLC (2%)* |
Packaging and Materials Handling Equipment Manufacturer | Subordinated Note (12% Cash, 2% PIK, Due 10/16) | 6,790,740 | 6,675,683 | 6,675,683 | |||||||||||
Class A Units (1,750,000 units) | 417,088 | 3,772,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
6,790,740 | 7,092,771 | 10,447,683 | ||||||||||||||
Main Street Gourmet, LLC (1%)* |
Baked Goods Provider | Subordinated Notes (12% Cash, 4.5% PIK, Due 10/16) | 4,182,542 | 4,113,502 | 4,113,502 | |||||||||||
Jr. Subordinated Notes (8% Cash, 2% PIK, Due 04/17) | 1,020,094 | 1,002,804 | 729,000 | |||||||||||||
Preferred Units (233 units) | 211,867 | | ||||||||||||||
Common B Units (3,000 units) | 23,140 | | ||||||||||||||
Common A Units (1,652 units) | 14,993 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,202,636 | 5,366,306 | 4,842,502 | ||||||||||||||
Plantation Products, LLC (3%)* |
Seed Manufacturing | Subordinated Notes (13% Cash, 4.5% PIK, Due 06/16) | 15,377,516 | 15,076,580 | 15,076,580 | |||||||||||
Preferred Units (1,127 units) | 1,127,000 | 1,244,000 | ||||||||||||||
Common Units (92,000 units) | 23,000 | 155,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
15,377,516 | 16,226,580 | 16,475,580 | ||||||||||||||
QC Holdings, Inc. (0%)* |
Lab Testing Services | Common Stock (5,594 shares) | 563,602 | 393,000 | ||||||||||||
|
|
|
|
|||||||||||||
563,602 | 393,000 | |||||||||||||||
Technology Crops International (2%)* |
Supply Chain Management Services | Subordinated Note (12% Cash, 5% PIK, Due 03/15) | 5,681,558 | 5,619,098 | 5,619,098 | |||||||||||
Common Units (50 Units) | 500,000 | 769,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,681,558 | 6,119,098 | 6,388,098 |
10
TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2012
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Venture Technology Groups, Inc. (1%)* |
Fluid and Gas Handling Products Distributor | Subordinated Note (12.5% Cash, 4% PIK, Due 09/16) | $ | 5,499,849 | $ | 5,400,372 | $ | 3,239,000 | ||||||||
Class A Units (1,000,000 Units) | 1,000,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,499,849 | 6,400,372 | 3,239,000 | ||||||||||||||
Waste Recyclers Holdings, LLC (1%)* |
Environmental and Facilities Services | Class A Preferred Units (280 Units) | 2,251,100 | | ||||||||||||
Class B Preferred Units (985,372 Units) | 3,304,218 | 4,115,000 | ||||||||||||||
Class C Preferred Units (1,444,475 Units) | 1,499,531 | 1,818,000 | ||||||||||||||
Common Unit Purchase Warrant (1,170,083 Units) | 748,900 | | ||||||||||||||
Common Units (153,219 Units) | 180,783 | | ||||||||||||||
|
|
|
|
|||||||||||||
7,984,532 | 5,933,000 | |||||||||||||||
Wythe Will Tzetzo, LLC (3%)* |
Confectionary Goods Distributor | Subordinated Notes (13% Cash, Due 10/16) | 10,357,475 | 9,904,615 | 9,904,615 | |||||||||||
Series A Preferred Units (74,764 units) | 1,500,000 | 1,987,000 | ||||||||||||||
Common Unit Purchase Warrants (25,065 units) | 301,510 | 443,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,357,475 | 11,706,125 | 12,334,615 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal Affiliate Investments |
82,642,636 | 98,502,634 | 101,197,149 | |||||||||||||
Control Investments: |
||||||||||||||||
FCL Graphics, Inc. (FCL) and |
Commercial Printing Services | Senior NoteFCL (5.0% Cash, Due 9/16) | 1,469,747 | 1,469,747 | 1,469,747 | |||||||||||
Senior NoteFCL (8.0% Cash, 2% PIK, Due 9/16) | 1,153,649 | 1,151,698 | 968,000 | |||||||||||||
Senior NoteSPV (2.4% Cash, 6% PIK, Due 9/16) | 964,486 | 964,486 | | |||||||||||||
Members InterestsSPV (299,875 Units) | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,587,882 | 3,585,931 | 2,437,747 | ||||||||||||||
Fire Sprinkler Systems, Inc. (0%)* |
Specialty Trade Contractors | Subordinated Notes (2% PIK, Due 04/12) | 3,473,830 | 2,955,028 | 208,000 | |||||||||||
Common Stock (2,978 shares) | 294,624 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,473,830 | 3,249,652 | 208,000 | ||||||||||||||
Fischbein, LLC (1%)* |
Packaging and Materials Handling Equipment Manufacturer | Class A-1 Common Units (501,984 units) | 59,315 | 283,816 | ||||||||||||
Class A Common Units (3,839,068 units) | 453,630 | 1,859,433 | ||||||||||||||
|
|
|
|
|||||||||||||
512,945 | 2,143,249 | |||||||||||||||
Gerli & Company (0%)* |
Specialty Woven Fabrics Manufacturer | Subordinated Note (8.5% Cash, Due 03/15) | 3,267,018 | 3,000,000 | 2,030,000 | |||||||||||
Class A Preferred Shares (1,211 shares) | 855,000 | | ||||||||||||||
Class C Preferred Shares (744 shares) | | | ||||||||||||||
Class E Preferred Shares (400 shares) | 161,440 | | ||||||||||||||
Common Stock (300 shares) | 100,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,267,018 | 4,116,440 | 2,030,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal Control Investments |
10,328,730 | 11,464,968 | 6,818,996 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total Investments, March 31, 2012 (132%)* |
$ | 501,423,386 | $ | 534,929,994 | $ | 544,435,197 | ||||||||||
|
|
|
|
|
|
* | Value as a percent of net assets |
(1) | All debt investments are income producing. Common stock, preferred stock and all warrants are nonincome producing. |
(2) | Disclosures of interest rates on notes include cash interest rates and paymentinkind (PIK) interest rates. |
(3) | All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors. |
(4) | Pine Street Holdings, LLC is the majority owner of Brantley Transportation, LLC and its sole business purpose is its ownership of Brantley Transportation, LLC. |
See accompanying notes.
11
Consolidated Schedule of Investments
December 31, 2011
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
NonControl / NonAffiliate Investments: |
||||||||||||||||
Ambient Air Corporation (AA) and Peaden-Hobbs Mechanical, LLC (PHM) (1%)* |
Specialty Trade Contractors | Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13) | $ | 4,127,773 | $ | 4,103,291 | $ | 4,103,291 | ||||||||
Subordinated Note-PHM (12% Cash, Due 09/12) | 12,857 | 12,857 | 12,857 | |||||||||||||
Common Stock-PHM (128,571 shares) | 128,571 | 128,571 | ||||||||||||||
Common Stock Warrants-AA (455 shares) | 142,361 | 760,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,140,630 | 4,387,080 | 5,004,719 | ||||||||||||||
Anns House of Nuts, Inc. (3%)* |
Trail Mixes and Nut Producers | Subordinated Note (12% Cash, 1% PIK, Due 11/17) | 7,080,843 | 6,716,662 | 6,716,662 | |||||||||||
Preferred A Units (22,368 units) | 2,124,957 | 2,407,000 | ||||||||||||||
Preferred B Units (10,380 units) | 986,059 | 1,204,000 | ||||||||||||||
Common Units (190,935 units) | 150,000 | | ||||||||||||||
Common Stock Warrants (14,558 shares) | 14,558 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,080,843 | 9,992,236 | 10,327,662 | ||||||||||||||
Aramsco, Inc. (1%) |
Environmental | Subordinated Note (12% Cash, 2% PIK, Due | ||||||||||||||
Emergency Preparedness Products Distributor | 03/14) | 1,800,997 | 1,673,278 | 1,673,278 | ||||||||||||
|
|
|
|
|
|
|||||||||||
1,800,997 | 1,673,278 | 1,673,278 | ||||||||||||||
Assurance Operations Corporation (0%)* |
Metal Fabrication | Common Stock (517 Shares) | 516,867 | 773,000 | ||||||||||||
|
|
|
|
|||||||||||||
516,867 | 773,000 | |||||||||||||||
BioSan Laboratories, Inc. (2%)* |
Nutritional | Subordinated Note (12% Cash, 3.8% PIK, Due | ||||||||||||||
Supplement Manufacturing and Distribution | 10/16) | 5,276,296 | 5,179,676 | 5,179,676 | ||||||||||||
|
|
|
|
|
|
|||||||||||
5,276,296 | 5,179,676 | 5,179,676 | ||||||||||||||
Botanical Laboratories, Inc. (3%)* |
Nutritional | Senior Notes (14% Cash, 1% PIK, Due 02/15) | 10,114,528 | 9,580,196 | 9,122,000 | |||||||||||
Supplement | Common Unit Warrants (998,680 Units) | 474,600 | | |||||||||||||
|
|
|
|
|
|
|||||||||||
Manufacturing | 10,114,528 | 10,054,796 | 9,122,000 | |||||||||||||
and Distribution | ||||||||||||||||
Capital Contractors, Inc. (3%)* |
Janitorial and Facilities Maintenance Services | Subordinated Notes (12% Cash, 2% PIK, Due 12/15) | 9,185,225 | 8,617,853 | 8,617,853 | |||||||||||
Common Stock Warrants (20 shares) | 492,000 | 398,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
9,185,225 | 9,109,853 | 9,015,853 | ||||||||||||||
Carolina Beverage Group, LLC (4%)* |
Beverage Manufacturing and Packaging | Subordinated Note (12% Cash, 4% PIK, Due 02/16) | 13,260,895 | 13,055,973 | 13,055,973 | |||||||||||
Class A Units (11,974 Units) | 1,077,615 | 1,120,000 | ||||||||||||||
Class B Units (11,974 Units) | 119,735 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,260,895 | 14,253,323 | 14,175,973 | ||||||||||||||
CRS Reprocessing, LLC (8%)* |
Fluid Reprocessing Services | Subordinated Note (12% Cash, 2% PIK, Due 11/15) | 11,357,260 | 11,022,004 | 11,022,004 | |||||||||||
Subordinated Note (10% Cash, 4% PIK, Due 11/15) | 11,016,583 | 10,020,937 | 10,020,937 | |||||||||||||
Series C Preferred Units (26 Units) | 288,342 | 476,000 | ||||||||||||||
Common Unit Warrant (550 Units) | 1,253,556 | 4,040,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
22,373,843 | 22,584,839 | 25,558,941 | ||||||||||||||
CV Holdings, LLC (5%)* |
Specialty Healthcare Products Manufacturer | Subordinated Note (12% Cash, 4% PIK, Due 09/13) | 9,279,054 | 8,845,875 | 8,845,875 | |||||||||||
Subordinated Note (12% Cash, Due 09/13) | 6,000,000 | 5,912,355 | 5,912,355 | |||||||||||||
Royalty rights | 874,400 | 920,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
15,279,054 | 15,632,630 | 15,678,230 | ||||||||||||||
DLR Restaurants, LLC (3%)* |
Restaurant | Subordinated Note (12% Cash, 3% PIK, Due 03/16) | 10,660,442 | 10,448,050 | 10,448,050 | |||||||||||
Subordinated Note (12% Cash, 4% PIK, Due 03/16) | 752,083 | 752,083 | 752,083 | |||||||||||||
Royalty rights | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
11,412,525 | 11,200,133 | 11,200,133 | ||||||||||||||
Electronic Systems Protection, Inc. (2%)* |
Power Protection Systems Manufacturing | Subordinated Note (12% Cash, 2% PIK, Due 12/15) | 4,162,798 | 4,128,357 | 4,128,357 | |||||||||||
Senior Note (8.3% Cash, Due 01/14) | 681,475 | 681,475 | 681,475 | |||||||||||||
Common Stock (570 shares) | 285,000 | 367,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,844,273 | 5,094,832 | 5,176,832 | ||||||||||||||
Frozen Specialties, Inc. (3%)* |
Frozen Foods Manufacturer | Subordinated Note (13% Cash, 5% PIK, Due 07/14) | 8,478,731 | 8,391,839 | 8,391,839 | |||||||||||
|
|
|
|
|
|
|||||||||||
8,478,731 | 8,391,839 | 8,391,839 | ||||||||||||||
Garden Fresh Restaurant Corp. (0%)* |
Restaurant | Membership Units (5,000 units) | 500,000 | 820,000 | ||||||||||||
|
|
|
|
|||||||||||||
500,000 | 820,000 | |||||||||||||||
Grindmaster-Cecilware Corp. (2%)* |
Food Services Equipment Manufacturer | Subordinated Note (12% Cash, 4.5% PIK, Due 04/16) | 6,274,350 | 6,198,309 | 5,104,000 | |||||||||||
|
|
|
|
|
|
|||||||||||
6,274,350 | 6,198,309 | 5,104,000 |
12
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2011
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Hatch Chile Co., LLC (2%)* |
Food Products Distributor | Senior Note (19% Cash, Due 07/15) | $ | 4,500,000 | $ | 4,411,111 | $ | 4,411,111 | ||||||||
Subordinated Note (14% Cash, Due 07/15) | 1,000,000 | 865,687 | 865,687 | |||||||||||||
Unit Purchase Warrant (5,265 Units) | 149,800 | 216,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,500,000 | 5,426,598 | 5,492,798 | ||||||||||||||
Home Physicians, LLC (HP) and Home Physicians Holdings, LP (HPH) (3%)* |
In-home primary care physician services | Subordinated Note-HP (12% Cash, 5% PIK, Due 03/16) | 10,654,096 | 10,454,979 | 8,868,000 | |||||||||||
Subordinated Note-HPH (4% Cash, 6% PIK, Due 03/16) | 1,283,791 | 1,283,791 | | |||||||||||||
Royalty rights | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
11,937,887 | 11,738,770 | 8,868,000 | ||||||||||||||
Infrastructure Corporation of America, Inc. (3%)* |
Roadway Maintenance, Repair and Engineering Services | Subordinated Note (12% Cash, 1% PIK, Due 10/15) | 10,878,815 | 9,876,796 | 9,876,796 | |||||||||||
Common Stock Purchase Warrant (199,526 shares) | 980,000 | 1,348,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,878,815 | 10,856,796 | 11,224,796 | ||||||||||||||
Inland Pipe Rehabilitation Holding Company LLC |
Cleaning and Repair Services | Subordinated Note (13% Cash, 2.5% PIK, Due 12/16) | 20,277,473 | 19,996,881 | 19,996,881 | |||||||||||
Membership Interest Purchase Warrant (3.0%) | 853,500 | 2,112,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
20,277,473 | 20,850,381 | 22,108,881 | ||||||||||||||
Library Systems & Services, LLC (2%)* |
Municipal Business Services | Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15) | 5,250,001 | 5,130,053 | 5,130,053 | |||||||||||
Common Stock Warrants (112 shares) | 58,995 | 723,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,250,001 | 5,189,048 | 5,853,053 | ||||||||||||||
Magpul Industries Corp. (4%) |
Firearm Accessories Manufacturer and Distributor | Subordinated Note (12% Cash, 3% PIK, Due 03/17) | 13,300,000 | 13,042,711 | 13,042,711 | |||||||||||
Preferred Units (1,470 Units) | 1,470,000 | 1,470,000 | ||||||||||||||
Common Units (30,000 Units) | 30,000 | 30,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,300,000 | 14,542,711 | 14,542,711 | ||||||||||||||
McKenzie Sports Products, LLC (2%)* |
Taxidermy Manufacturer | Subordinated Note (13% Cash, 1% PIK, Due 10/17) | 6,071,841 | 5,966,205 | 5,966,205 | |||||||||||
|
|
|
|
|
|
|||||||||||
6,071,841 | 5,966,205 | 5,966,205 | ||||||||||||||
Media Storm, LLC (3%)* |
Marketing Services | Subordinated Note (12% Cash, 2% PIK, Due 10/17) | 8,532,111 | 8,449,580 | 8,449,580 | |||||||||||
Membership Units (1,216,204 Units) | 1,216,204 | 1,216,204 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,532,111 | 9,665,784 | 9,665,784 | ||||||||||||||
Media Temple, Inc. (5%)* |
Web Hosting Services | Subordinated Note (12% Cash, 5.5% PIK, Due 04/15) | 8,800,000 | 8,658,463 | 8,658,463 | |||||||||||
Convertible Note (8% Cash, 6% PIK, Due 04/15) | 3,200,000 | 2,778,030 | 4,687,000 | |||||||||||||
Common Stock Purchase Warrant (28,000 Shares) | 536,000 | 2,051,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
12,000,000 | 11,972,493 | 15,396,463 | ||||||||||||||
Minco Technology Labs, LLC (2%)* |
Semiconductor Distribution | Subordinated Note (13% Cash, 3.25% PIK, Due 05/16) | 5,272,430 | 5,170,334 | 5,170,334 | |||||||||||
Class A Units (5,000 Units) | 500,000 | 31,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,272,430 | 5,670,334 | 5,201,334 | ||||||||||||||
National Investment Managers Inc. (4%)* |
Retirement Plan Administrator | Subordinated Note (11% Cash, 5% PIK, Due 09/16) | 11,703,034 | 11,450,996 | 11,450,996 | |||||||||||
Preferred A Units (90,000 Units) | 900,000 | 479,000 | ||||||||||||||
Common Units (10,000 Units) | 100,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
11,703,034 | 12,450,996 | 11,929,996 | ||||||||||||||
Novolyte Technologies, Inc. (4%)* |
Specialty Manufacturing | Subordinated Note (12% Cash, 4% PIK, Due 07/16) | 7,264,182 | 7,143,362 | 7,143,362 | |||||||||||
Subordinated Note (12% Cash, 4% PIK, Due 07/16) | 2,334,916 | 2,296,081 | 2,296,081 | |||||||||||||
Preferred Units (641 units) | 661,227 | 888,000 | ||||||||||||||
Common Units (24,522 units) | 165,306 | 1,744,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
9,599,098 | 10,265,976 | 12,071,443 | ||||||||||||||
Pomeroy IT Solutions (3%)* |
Information | Subordinated Notes (13% Cash, 2% PIK, Due | ||||||||||||||
Technology Outsourcing Services | 02/16) | 10,181,198 | 9,955,154 | 9,955,154 | ||||||||||||
|
|
|
|
|
|
|||||||||||
10,181,198 | 9,955,154 | 9,955,154 | ||||||||||||||
PowerDirect Marketing, LLC (2%)* |
Marketing Services | Subordinated Note (12% Cash, 2% PIK, Due 05/16) | 8,100,993 | 7,580,433 | 7,580,433 | |||||||||||
Common Unit Purchase Warrants | 402,000 | 548,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,100,993 | 7,982,433 | 8,128,433 | ||||||||||||||
Renew Life Formulas, Inc. (4%)* |
Nutritional | Subordinated Notes (12% Cash, 3% PIK, Due | ||||||||||||||
Supplement | 03/15) | 13,401,006 | 13,155,235 | 13,155,235 | ||||||||||||
Manufacturing | ||||||||||||||||
and | ||||||||||||||||
Distribution | ||||||||||||||||
|
|
|
|
|
|
|||||||||||
13,401,006 | 13,155,235 | 13,155,235 |
13
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2011
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Sheplers, Inc. (4%)* |
Western Apparel Retailer | Subordinated Note (13.15% Cash, Due 12/16) | $ | 8,750,000 | $ | 8,531,250 | $ | 8,531,250 | ||||||||
Subordinated Note (10% Cash, 7% PIK, Due 12/17) | 3,758,021 | 3,683,021 | 3,683,021 | |||||||||||||
|
|
|
|
|
|
|||||||||||
12,508,021 | 12,214,271 | 12,214,271 | ||||||||||||||
SRC, Inc. (3%)* |
Specialty Chemical Manufacturer | Subordinated Notes (12% Cash, 2% PIK, Due 09/14) | 8,879,665 | 8,640,013 | 8,640,013 | |||||||||||
Common Stock Purchase Warrants | 123,800 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,879,665 | 8,763,813 | 8,640,013 | ||||||||||||||
Syrgis Holdings, Inc. (1%)* |
Specialty Chemical Manufacturer | Senior Notes (7.75%-10.75% Cash, Due 08/12-02/14) | 2,444,766 | 2,437,942 | 2,437,942 | |||||||||||
Class C Units (2,114 units) | 1,000,000 | 1,597,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
2,444,766 | 3,437,942 | 4,034,942 | ||||||||||||||
TBG Anesthesia Management, LLC (3%)* |
Physician Management Services | Senior Note (13.5% Cash, Due 11/14) | 10,750,000 | 10,445,062 | 10,445,062 | |||||||||||
Warrant (263 shares) | 276,100 | 239,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,750,000 | 10,721,162 | 10,684,062 | ||||||||||||||
TMR Automotive Service Supply, LLC (2%) |
Automotive Supplies | Subordinated Note (12% Cash, 1% PIK, Due 03/16) | 5,000,000 | 4,738,933 | 4,738,933 | |||||||||||
Unit Purchase Warrant (329,518 units) | 195,000 | 284,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,000,000 | 4,933,933 | 5,022,933 | ||||||||||||||
Top Knobs USA, Inc. (3%) |
Hardware Designer and Distributor | Subordinated Note (12% Cash, 4.5% PIK, Due 05/17) | 10,369,002 | 10,209,875 | 10,209,875 | |||||||||||
Common Stock (26,593 shares) | 750,000 | 733,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,369,002 | 10,959,875 | 10,942,875 | ||||||||||||||
Trinity Consultants Holdings, Inc. (2%)* |
Air Quality Consulting Services | Subordinated Note (12% Cash, 2.5% PIK, Due 11/17) | 7,216,500 | 7,072,500 | 7,072,500 | |||||||||||
Series A Preferred Stock (10,000 units) | 950,000 | 950,000 | ||||||||||||||
Common Stock (55,556 units) | 50,000 | 50,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,216,500 | 8,072,500 | 8,072,500 | ||||||||||||||
TrustHouse Services Group, Inc. (4%)* |
Food Management Services | Subordinated Note (12% Cash, 2% PIK, Due 07/18) | 13,362,115 | 13,136,232 | 13,136,232 | |||||||||||
Class A Units (1,557 units) | 512,124 | 799,000 | ||||||||||||||
Class B Units (82 units) | 26,954 | 28,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
13,362,115 | 13,675,310 | 13,963,232 | ||||||||||||||
Tulsa Inspection Resources, Inc. (2%)* |
Pipeline Inspection Services | Subordinated Note (14%-17.5% Cash, Due 03/14) | 5,810,588 | 5,574,292 | 5,574,292 | |||||||||||
Common Unit (1 unit) | 200,000 | 117,000 | ||||||||||||||
Common Stock Warrants (8 shares) | 321,000 | 627,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,810,588 | 6,095,292 | 6,318,292 | ||||||||||||||
Twin-Star International, Inc. (2%)* |
Consumer Home Furnishings Manufacturer | Subordinated Note (12% Cash, 1% PIK, Due 04/14) | 4,500,000 | 4,476,065 | 4,476,065 | |||||||||||
Senior Note (4.4%, Due 04/13) | 1,052,240 | 1,052,240 | 1,052,240 | |||||||||||||
|
|
|
|
|
|
|||||||||||
5,552,240 | 5,528,305 | 5,528,305 | ||||||||||||||
Wholesale Floors, Inc. (1%)* |
Commercial Services | Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14) | 3,858,183 | 3,773,066 | 3,773,066 | |||||||||||
Membership Interest Purchase Warrant (4.0%) | 132,800 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,858,183 | 3,905,866 | 3,773,066 | ||||||||||||||
Workforce Software, LLC (2%)* |
Software Provider | Subordinated Note (11% Cash, 3% PIK, Due 11/16) | 7,000,000 | 6,065,200 | 6,065,200 | |||||||||||
Class B Preferred Units (1,020,000 units) | 1,020,000 | 1,020,000 | ||||||||||||||
Common Unit Purchase Warrants (2,224,561 units) | 782,300 | 782,300 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,000,000 | 7,867,500 | 7,867,500 | ||||||||||||||
Yellowstone Landscape Group, Inc. (4%)* |
Landscaping Services | Subordinated Note (12% Cash, 3% PIK, Due 04/14) | 12,816,222 | 12,678,077 | 12,678,077 | |||||||||||
|
|
|
|
|
|
|||||||||||
12,816,222 | 12,678,077 | 12,678,077 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal NonControl / NonAffiliate Investments |
377,095,379 | 389,312,451 | 396,502,490 |
14
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2011
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Affiliate Investments: |
||||||||||||||||
American De-Rosa Lamparts, LLC and Hallmark Lighting (2%)* |
Wholesale and Distribution | Subordinated Note (10% PIK, Due 10/13) | $ | 6,056,794 | $ | 5,213,450 | $ | 5,213,450 | ||||||||
Membership Units (6,516 Units) | 350,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
6,056,794 | 5,563,450 | 5,213,450 | ||||||||||||||
AP Services, Inc. (2%)* |
Fluid Sealing Supplies and Services | Subordinated Note (12% Cash, 2% PIK, Due 09/15) | 4,351,545 | 4,258,465 | 4,258,465 | |||||||||||
Class A Units (933 units) | 933,333 | 1,181,000 | ||||||||||||||
Class B Units (496 units) | | 80,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
4,351,545 | 5,191,798 | 5,519,465 | ||||||||||||||
Asset Point, LLC (2%)* |
Asset Management Software Provider | Senior Note (12% Cash, 5% PIK, Due 03/13) | 6,054,948 | 6,024,163 | 6,024,163 | |||||||||||
Senior Note (12% Cash, 2% PIK, Due 07/15) | 617,572 | 617,572 | 518,000 | |||||||||||||
Subordinated Note (7% Cash, Due 03/13) | 941,798 | 941,798 | 786,000 | |||||||||||||
Membership Units (1,000,000 units) | 8,203 | 346,000 | ||||||||||||||
Options to Purchase Membership Units (342,407 units) | 500,000 | 149,000 | ||||||||||||||
Membership Unit Warrants (356,506 units) | | 2,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
7,614,318 | 8,091,736 | 7,825,163 | ||||||||||||||
Axxiom Manufacturing, Inc. (0%)* |
Industrial Equipment Manufacturer | Common Stock (136,400 shares) | 200,000 | 1,140,000 | ||||||||||||
Common Stock Warrant (4,000 shares) | | 33,000 | ||||||||||||||
|
|
|
|
|||||||||||||
200,000 | 1,173,000 | |||||||||||||||
Brantley Transportation, LLC (Brantley Transportation) and Pine Street Holdings, LLC (Pine
Street) (4) |
Oil and Gas Services | Subordinated NoteBrantley Transportation (14% Cash, 5% PIK, Due 12/12) | 3,947,627 | 3,915,231 | 3,915,231 | |||||||||||
Common Unit WarrantsBrantley Transportation (4,560 common units) | 33,600 | 401,000 | ||||||||||||||
Preferred UnitsPine Street (200 units) | 200,000 | 757,000 | ||||||||||||||
Common Unit WarrantsPine Street (2,220 units) | | 99,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,947,627 | 4,148,831 | 5,172,231 | ||||||||||||||
Captek Softgel International, Inc. (3%)* |
Nutraceutical Manufacturer | Subordinated Note (12% Cash, 4% PIK, Due 08/16) | 8,277,116 | 8,133,312 | 8,133,312 | |||||||||||
Class A Units (80,000 units) | 800,000 | 1,292,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
8,277,116 | 8,933,312 | 9,425,312 | ||||||||||||||
Dyson Corporation (1%)* |
Custom Forging and Fastener Supplies | Class A Units (1,000,000 units) |
|
1,000,000
|
|
|
3,836,000
|
| ||||||||
|
|
|
|
|||||||||||||
1,000,000 | 3,836,000 | |||||||||||||||
Equisales, LLC (1%)* |
Energy Products and Services | Subordinated Note (13% Cash, 4% PIK, Due 04/12) | 3,125,336 | 3,116,853 | 3,045,000 | |||||||||||
Class A Units (500,000 units) | 480,900 | 535,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,125,336 | 3,597,753 | 3,580,000 | ||||||||||||||
Fischbein Partners, LLC (3%)* |
Packaging and Materials Handling Equipment Manufacturer | Subordinated Note (12% Cash, 2% PIK, Due 10/16) | 6,756,525 | 6,636,697 | 6,636,697 | |||||||||||
Class A Units (1,750,000 units) | 417,088 | 3,344,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
6,756,525 | 7,053,785 | 9,980,697 | ||||||||||||||
Main Street Gourmet, LLC (1%)* |
Baked Goods Provider | Subordinated Notes (12% Cash, 4.5% PIK, Due 10/16) | 4,135,501 | 4,063,598 | 4,063,598 | |||||||||||
Jr. Subordinated Notes (8% Cash, 2% PIK, Due 04/17) | 1,014,963 | 996,975 | 716,000 | |||||||||||||
Preferred Units (233 units) | 211,867 | | ||||||||||||||
Common B Units (3,000 units) | 23,140 | | ||||||||||||||
Common A Units (1,652 units) | 14,993 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,150,464 | 5,310,573 | 4,779,598 | ||||||||||||||
Plantation Products, LLC (5%)* |
Seed Manufacturing | Subordinated Notes (13% Cash, 4.5% PIK, Due 06/16) | 15,203,916 | 14,889,867 | 14,889,867 | |||||||||||
Preferred Units (1,127 units) | 1,127,000 | 1,221,000 | ||||||||||||||
Common Units (92,000 units) | 23,000 | 142,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
15,203,916 | 16,039,867 | 16,252,867 | ||||||||||||||
QC Holdings, Inc. (0%)* |
Lab Testing Services | Common Stock (5,594 shares) | 563,602 | 393,000 | ||||||||||||
|
|
|
|
|||||||||||||
563,602 | 393,000 | |||||||||||||||
Technology Crops International (2%)* |
Supply Chain Management Services | Subordinated Note (12% Cash, 5% PIK, Due 03/15) | 5,610,350 | 5,543,617 | 5,543,617 | |||||||||||
Common Units (50 Units) | 500,000 | 589,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,610,350 | 6,043,617 | 6,132,617 |
15
TRIANGLE CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2011
Portfolio Company |
Industry |
Type of Investment(1)(2) |
Principal Amount |
Cost | Fair Value(3) |
|||||||||||
Venture Technology Groups, Inc. (2%)* |
Fluid and Gas | Subordinated Note (12.5% Cash, 4% PIK, | ||||||||||||||
Handling Products Distributor | Due 09/16) | $ | 5,444,612 | $ | 5,341,062 | $ | 5,341,062 | |||||||||
Class A Units (1,000,000 Units) | 1,000,000 | 530,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
5,444,612 | 6,341,062 | 5,871,062 | ||||||||||||||
Waste Recyclers Holdings, LLC (2%)* |
Environmental and Facilities Services | Class A Preferred Units (280 Units) | 2,251,100 | | ||||||||||||
Class B Preferred Units (985,372 Units) | 3,304,218 | 4,310,000 | ||||||||||||||
Class C Preferred Units (1,444,475 Units) | 1,499,531 | 1,752,000 | ||||||||||||||
Common Unit Purchase Warrant (1,170,083 Units) | 748,900 | | ||||||||||||||
Common Units (153,219 Units) | 180,783 | | ||||||||||||||
|
|
|
|
|||||||||||||
7,984,532 | 6,062,000 | |||||||||||||||
Wythe Will Tzetzo, LLC (4%)* |
Confectionary Goods Distributor | Subordinated Notes (13% Cash, Due 10/16) | 10,357,475 | 9,885,836 | 9,885,836 | |||||||||||
Series A Preferred Units (74,764 units) | 1,500,000 | 1,784,000 | ||||||||||||||
Common Unit Purchase Warrants (25,065 units) | 301,510 | 380,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
10,357,475 | 11,687,346 | 12,049,836 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal Affiliate Investments |
81,896,078 | 97,751,264 | 103,266,298 | |||||||||||||
Control Investments: |
||||||||||||||||
FCL Graphics, Inc. (FCL) and FCL Holding SPV, LLC (SPV) (1%)* |
Commercial Printing Services | Senior NoteFCL (5.0% Cash, Due 9/16) | 1,485,821 | 1,478,538 | 1,478,538 | |||||||||||
Senior NoteFCL (8.0% Cash, 2% PIK, Due 9/16) | 1,147,836 | 1,145,436 | 955,000 | |||||||||||||
Senior NoteSPV (2.5% Cash, 6% PIK, Due 9/16) | 950,328 | 950,328 | 343,000 | |||||||||||||
Members InterestsSPV (299,875 Units) | | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,583,985 | 3,574,302 | 2,776,538 | ||||||||||||||
Fire Sprinkler Systems, Inc. (0%)* |
Specialty Trade Contractors | Subordinated Notes (2% PIK, Due 04/12) | 3,281,284 | 2,780,028 | 443,000 | |||||||||||
Common Stock (2,978 shares) | 294,624 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,281,284 | 3,074,652 | 443,000 | ||||||||||||||
Fischbein, LLC (1%)* |
Packaging and Materials Handling Equipment Manufacturer | Class A-1 Common Units (501,984 units) | 59,315 | 283,816 | ||||||||||||
Class A Common Units (3,839,068 units) |
|
453,630 |
|
|
1,859,433 |
| ||||||||||
|
|
|
|
|||||||||||||
512,945 | 2,143,249 | |||||||||||||||
Gerli & Company (1%)* |
Specialty Woven Fabrics Manufacturer | Subordinated Note (8.5% Cash, Due 03/15) | 3,198,299 | 3,000,000 | 1,947,000 | |||||||||||
Class A Preferred Shares (1,211 shares) | 855,000 | | ||||||||||||||
Class C Preferred Shares (744 shares) | | | ||||||||||||||
Class E Preferred Shares (400 shares) | 161,440 | | ||||||||||||||
Common Stock (300 shares) | 100,000 | | ||||||||||||||
|
|
|
|
|
|
|||||||||||
3,198,299 | 4,116,440 | 1,947,000 | ||||||||||||||
|
|
|
|
|
|
|||||||||||
Subtotal Control Investments |
10,063,568 | 11,278,339 | 7,309,787 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total Investments, December 31, 2011(152%)* |
$ | 469,055,025 | $ | 498,342,054 | $ | 507,078,575 | ||||||||||
|
|
|
|
|
|
* | Value as a percent of net assets |
(1) | All debt investments are income producing. Common stock, preferred stock and all warrants are nonincome producing. |
(2) | Disclosures of interest rates on subordinated notes include cash interest rates and paymentinkind (PIK) interest rates. |
(3) | All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors. |
(4) | Pine Street Holdings, LLC is the majority owner of Brantley Transportation, LLC and its sole business purpose is its ownership of Brantley Transportation, LLC. |
See accompanying notes.
16
Notes to Unaudited Consolidated Financial Statements
1. ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS
Organization
Triangle Capital Corporation and its wholly owned subsidiaries, including Triangle Mezzanine Fund LLLP ( Triangle SBIC) and Triangle Mezzanine Fund II LP (Triangle SBIC II) (collectively, the Company), operates as a Business Development Company (BDC) under the Investment Company Act of 1940 (the 1940 Act). Triangle SBIC and Triangle SBIC II are specialty finance limited partnerships formed to make investments primarily in middle market companies located throughout the United States. On September 11, 2003, Triangle SBIC was licensed to operate as a Small Business Investment Company (SBIC) under the authority of the United States Small Business Administration (SBA). On May 26, 2010, Triangle SBIC II obtained its license to operate as an SBIC. As SBICs, both Triangle SBIC and Triangle SBIC II are subject to a variety of regulations concerning, among other things, the size and nature of the companies in which they may invest and the structure of those investments.
The Company currently operates as a closedend, nondiversified investment company and has elected to be treated as a BDC under the 1940 Act. The Company is internally managed by its executive officers under the supervision of its Board of Directors. The Company does not pay management or advisory fees, but instead incurs the operating costs associated with employing executive management and investment and portfolio management professionals.
Basis of Presentation
The financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries, including Triangle SBIC and Triangle SBIC II. Neither Triangle SBIC nor Triangle SBIC II consolidates portfolio company investments. The effects of all intercompany transactions between the Company and its subsidiaries have been eliminated in consolidation.
The accompanying unaudited financial statements are presented in conformity with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current periods results of operations are not necessarily indicative of results that ultimately may be achieved for the year. Additionally, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the period ended December 31, 2011. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
Recently Issued Accounting Standards
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurements (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, or ASU 2011-04. ASU 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes the application of some requirements for measuring fair value and requires additional disclosure for fair value measurements categorized in Level 3 of the fair value hierarchy. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of ASU 2011-04 did not have a material impact on the Companys process for measuring fair values or on its financial statements, other than the inclusion of additional required disclosures.
Reclassifications
Certain reclassifications have been made in the consolidated financial statements for the quarter ended March 31, 2011 in order to conform to current presentation. The Company had historically included losses realized on the extinguishment of debt in Amortization of deferred financing fees in the Consolidated Statements of Operations. Effective January 1, 2012, the Company records losses on the extinguishment of debt as a separate line item in the Consolidated Statements of Operations. See Note 4 to the Consolidated Financial Statements for further discussion of deferred financing fees.
17
2. INVESTMENTS
The Company primarily invests in subordinated debt (or 2nd lien notes) of privately held companies. These subordinated debt investments generally are secured by a second priority security interest in the assets of the borrower. In addition, the Company generally invests in an equity instrument of the borrower, such as warrants to purchase common stock in the portfolio company or direct preferred or common equity interests. The Company also invests in senior debt (or 1st lien notes) on a more limited basis.
The cost basis of our debt investments include any unamortized original issue discount, unamortized loan origination fees and paymentinkind (PIK) interest, if any. Summaries of the composition of the Companys investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables:
Cost | Percentage of Total Portfolio |
Fair Value | Percentage of Total Portfolio |
|||||||||||||
March 31, 2012: |
||||||||||||||||
Subordinated debt and 2nd lien notes |
$ | 417,351,461 | 78 | % | $ | 408,479,846 | 75 | % | ||||||||
Senior debt and 1st lien notes |
68,624,919 | 13 | 68,441,221 | 13 | ||||||||||||
Equity shares |
38,948,717 | 7 | 49,504,013 | 9 | ||||||||||||
Equity warrants |
9,130,497 | 2 | 17,178,117 | 3 | ||||||||||||
Royalty rights |
874,400 | | 832,000 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 534,929,994 | 100 | % | $ | 544,435,197 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
December 31, 2011: |
||||||||||||||||
Subordinated debt and 2nd lien notes |
$ | 393,830,719 | 79 | % | $ | 387,169,056 | 76 | % | ||||||||
Senior debt and 1st lien notes |
60,622,827 | 12 | 59,974,195 | 12 | ||||||||||||
Equity shares |
34,741,728 | 7 | 43,972,024 | 9 | ||||||||||||
Equity warrants |
8,272,380 | 2 | 15,043,300 | 3 | ||||||||||||
Royalty rights |
874,400 | | 920,000 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 498,342,054 | 100 | % | $ | 507,078,575 | 100 | % | |||||||||
|
|
|
|
|
|
|
|
During the three months ended March 31, 2012, the Company made four new investments totaling approximately $41.0 million and investments in three existing portfolio companies totaling approximately $1.0 million. During the three months ended March 31, 2011, the Company made five new investments totaling approximately $51.5 million and investments in four existing portfolio companies totaling approximately $16.8 million.
Investment Valuation Process
The Company has established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC Topic 820). Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. The three levels of valuation inputs established by ASC Topic 820 are as follows:
Level 1 Inputs quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 Inputs include inputs that are unobservable and significant to the fair value measurement.
The Companys investment portfolio is comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are not available. Therefore, the Company determines the fair value of its investments in good faith using level 3 inputs, pursuant to a valuation policy and process that is established by the management of the Company with the assistance of certain third-party advisors and subsequently approved by the Companys Board of Directors. There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Companys investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.
18
The Companys valuation process is led by the Companys executive officers and managing directors. The Companys valuation process begins with a quarterly review of each investment in the Companys investment portfolio by the Companys executive officers and investment committee. Valuations of each portfolio security are then prepared by the Companys investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under the Companys valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer of the Company. Generally, any investment that is valued below cost is subjected to review by one of the Companys executive officers. After the peer review is complete, the Company engages Duff & Phelps, LLC (Duff & Phelps), an independent valuation firm, to provide a third-party review of certain investments, as described further below. In addition, all investment valuations are provided to the Companys independent registered public accounting firm each quarter in connection with quarterly review procedures and the annual audit of our financial statements. Finally, the Board of Directors has the responsibility for reviewing and approving, in good faith, the fair value of the Companys investments in accordance with the 1940 Act.
Duff & Phelps provides third party valuation consulting services to the Company which consist of certain limited procedures that the Company identified and requested Duff & Phelps to perform (hereinafter referred to as the procedures). The Company generally requests Duff & Phelps to perform the procedures on each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Company generally requests Duff & Phelps to perform the procedures on a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the Companys stockholders best interest, to request Duff & Phelps to perform the procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.
The total number of investments and the percentage of the investment portfolio on which the Company asked Duff & Phelps to perform such procedures are summarized below by period:
For the quarter ended: |
Total companies |
Percent of total investments at fair value(1) |
||||